They Learned Nothing from the Experience

Now that's a hockey-stick (WSJ graph)

The 1970's-type inflation that we've been predicting for over a year is here with a vengeance.

U.S. Inflation Hit 8.6% in May: Energy, groceries, shelter costs drive fastest rise in consumer-price index since December 1981

U.S. consumer inflation reached an 8.6% annual rate in May, its highest level in more than four decades as surging energy and food prices pushed prices higher...

May’s increase was driven in part by sharp rises in the prices for energy, which rose 34.6% from a year earlier, and groceries, which jumped 11.9% on the year, the biggest increase since 1979. But inflation pressures were distinctly broad-based in May, said Sarah House, senior economist at Wells Fargo Securities.

“Inflationary pressures were seen nearly everywhere,” she said.

Prices for used cars and trucks—a key engine of the past year’s inflation surge—rose 1.8% in May from April, reversing three months of declines. Shelter costs, an indicator of broad inflation pressures, accelerated on a monthly basis in May and were up 5.5% compared with a year ago.

Airline fares rose 12.6% on the month, the third straight double-digit rise.

The younger folk who have never lived through high inflation may be forgiven for not seeing the warning signs, but the gerontocrats who run the country have no excuses.

But wait--it could get worse. We are already seeing early signs of a recession with layoffs in tech and a cooling housing market (mortgage interest rates have risen above 5%). The dreaded stagnation + inflation = stagflation is possibly looming. It will require skilled economic leadership to engineer a "soft landing," i.e., reduce inflation without cratering the economy.

Based on their performance so far, how would you bet, dear reader?